What’s on the Horizon for 2026

Cook Brown held its annual Employment Law Update on November 19, 2025. As part of this update, Cook Brown attorneys discussed the following statutory changes signed into law this session. Unless otherwise noted, these measures will go into effect January 1, 2026.

Pay Practices SB 642 California Equal Pay Act

SB 642 California Equal Pay Act makes changes to California’s pay scale disclosure requirements and the California Equal Pay Act, which generally prohibits employers from paying employees an amount less than employees of a different gender, race or ethnicity for substantially similar work. Additionally, employers must provide pay scale information to applicants and employees when requested, and employers with 15 or more employees must post pay scale information in job postings. SB 642 revises the definition of “pay scale” to provide that a “good faith estimate” of the salary or hourly wage range the employer reasonable expects to pay “upon hire.” The bills also increases the statute of limitations on such claims to also allow recovery to reach back as far as six years.

SB 464 Pay Scale Disclosure Updates require demographic information collected by an employer for pay data reporting purposes to increase the number of job categories in the report from 10 to 23 beginning January 1, 2027. This reporting obligation applies to employers with 100 or more employees.

Minimum Wage

Effective January 1, 2026, California’s minimum wage will increase to $16.90 per hour. This means that the minimum salary for most exempt employees will be $70,304 annually and $5,859 per month. Moreover, twice the minimum wage for the hand tool exemption = $33.80/hr.

Employment Contracts

AB 692 Employment Contracts in the Workplace prohibits most employment contracts that require employees to repay training costs or impose penalties/fees if they leave before a specified period. The statute does make exceptions (e.g. bona fide tuition reimbursement or signing bonus agreements), but only if properly structured.

AB 288 Collective Bargaining expands the Public Employee Rights Board’s (PERB) jurisdiction to enforce labor laws with respect to private-sector employees, who are generally covered by the federal National Labor Relations Act (NLRA), enforced by the National Labor Relations Board (NLRB). Under AB 288, PERB will be able to hear unfair practice charges, conduct union elections, certify bargaining representatives, and order certain remedies, among other things.

Note: The NLRB has already filed a lawsuit challenging AB 288 on the grounds that it’s preempted by the NLRA.

AB 1340 Transportation Network Company Drivers Labor Relations Act is created to provide app-based drivers with the right to unionize, despite passage of Proposition 22, and their status as independent contractors. Through this new law, these drivers are given a statutory right to form a union and engage in concerted activities for the purpose of bargaining. The law provides that PERB would have jurisdiction over such disputes.

SB 261 Unsatisfied Wage Judgments significantly increases penalties and fees for employers with unpaid wage judgments and expands the Labor Commissioner’s prosecutorial authority. The law essentially triples the Penalties if the judgement is not paid within 180 days after the appeal period lapsed, a triple penalty plus interest may be imposed.

SB 805 Construction Trucking Employee Amnesty Program creates an amnesty program administered by Labor Commissioner to relieve eligible construction contractors of liability for statutory or civil penalties associated with the misclassification of construction drivers as independent contractors if:

• Construction contractor agrees to properly classify all drivers performing construction work on their behalf as employees.

• Settlement agreement contains prescribed components, including to pay all wages, benefits, and taxes owed.

• Must execute a settlement agreement with the commissioner prior to 1.1.27.

AB 406 Leave for Victims of Violence clarifies many of the victim’s leave provisions and moves from the Labor Code to the FEHA in the Government Code, giving the California Civil Rights Department (CRD) enforcement jurisdiction. The bills also updates the list of reasons why employees may use PSL to align with the revised codes. This measure took effect when it was signed on October 1, 2025.

SB 590 Paid Family Leave Benefits expands the list eligible individuals will be able to receive paid family leave benefits as of July 1, 2028, to include a seriously ill “designated person.” The bill specifies that any blood relative or individual who is the equivalent of family, even if the individual is not biologically or legally related to the employee, will fall within the definition.

Notice and Recordkeeping Requirements

SB 294 The Workplace “Know Your Rights Act” requires employers to distribute a new annual notice to their employees with information including:

• immigration protections

• workers’ compensation

• the right to engage in concerted activity and constitutional rights when interacting with law enforcement.

Employers have until February 1, 2026, to provide it to their employees, and it must be provided to all new hires and annually to all employees thereafter. The California Labor Commissioner will have a template notice by January 1, 2026, that employers may use to comply.

SB 617 CalWARN Notifications expands on the list of items to be included on a CalWARN notice in addition to the information already required:

• whether the employer plans to coordinate services through the local workforce development board.

• information about their local workforce development.

• information about California’s food assistance program known as CalFresh; and

• employer contact name, number and email address.

SB 303 Bias Mitigation Training adds new provisions to FEHA to address concerns that bias-related training information could be misused in discrimination claims against employees or employers. The statute now provides that an employee’s assessment, testing, admission, or acknowledgment of their own personal bias made as part of a bias mitigation training.

SB 513 Recordkeeping Practices amends Labor Code 1198.5 to provide that personnel records relating to the employee’s performance include education and training records and require that such education and training records include specified information including:

(A) Name of employee
(B) Name of training provider
(C) Duration and date of training
(D) Core competencies of training, including skills in equipment or software
(E) Resulting certification or qualification

SB 446 Data Breach Notifications specifies that amount of time a data breach notification is required within a certain amount of time. In most circumstances, there is now a 30-day deadline to report a data breach to CA residents whose “personal information” was or is reasonably believed to have been acquired by an unauthorized person. This disclosure may be delayed to accommodate the legitimate needs of law enforcement or as necessary to determine the scope of breach and restore the reasonable integrity of data system.

AB 858 Pandemic-Related Recall extends the rights for employees to recall in hospitality, service, and travel industry from the end of this year to January 1, 2027. The law requires that within five business days of establishing a position, the employer must offer it to a qualified laid off employee first.

For specific questions regarding how any of these new laws will impact your workplace, please contact your Cook Brown attorney.